SYDNEY -- A notorious party drug could one day be prescribed to Australian patients suffering depression, with a multi-million dollar trial of ketamine's potential to treat mental illness to get underway.

A sedative and a painkiller, Ketamine is currently only available in Australia for use as a prescription anaesthetic under strict controls.

Loo said one-in-three people suffering a major depression didn't respond to to traditional anti-depressant drugs.

“Our research has clearly shown the potential for ketamine to be an effective new treatment option for depression,” Loo said.

“We are aware that people have been accessing ketamine as an off-label depression treatment and this is a dangerous situation.

“Ketamine can have serious side effects and we do not yet have a clinical understanding of appropriate dosage level, method of administration, length of treatment, identification of patient suitability or long term safety profiles.”

She said the new trial would also enable researchers "to measure efficacy under different circumstances within a safe, clinical environment".